Ethical online grocery delivery service Modern Milkman slashed losses by more than half last year, its latest financial results have shown.
The Manchester-based doorstep delivery business posted an operating loss of £10.5m in the year to 31 December 2023, according to accounts posted at Companies House – a 54% improvement on the previous year’s £22.8m loss.
Operating margin also improved, from minus 49% to minus 22%, with the positive trend continuing into 2024, Modern Milkman said. Meanwhile, turnover rose by 1.5% to £46.2m and gross margin increased from 50% to 56%.
The business attributed its improved performance to a shift from “growth at all costs” towards a more sustainable business model in the second half of 2022.
This work continued into 2023 “with efforts concentrated on enhancing operational efficiency across the fulfilment network and head office functions,” its accounts revealed.
“This resulted in a significantly leaner operation with substantial improvements in profitability, creating a strong foundation for future expansion.”
Modern Milkman was established in 2018 by CEO Simon Mellin and three friends. It has attracted more than £50m over several rounds of fundraising and says its glass bottle and returnable container business model has prevented 95 million plastic bottles from polluting the planet so far.
2024 has seen Modern Milkman acquire its US namesake in March, as part of an ambitious expansion to take its sustainability mission overseas. The business also launched a refillables range in May, made up of breakfast staples including cornflakes, choco pops, rice pops and sugar.
“Modern Milkman is pleased with what our team have achieved in the last year,” said chief financial officer Lambro Anastasiou.
“In the UK, we have focused on managing costs and moving towards profitability. Despite inflation and other macroeconomic headwinds, we’ve cut losses and increased our gross margin, whilst still achieving a modest UK growth,” he added.
”This strategy has helped us channel more resources into the North East coast of the USA following our recent acquisition of Modern Milkman (US), where we’ll be channelling our energy to drive growth there, as well as in the UK.”
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